U.S. media company, Meredith Corporation, announced on Sunday that it will be buying Time Inc. in a $1.48 billion all-cash deal. Time Inc. is the publisher of People, Sports Illustrated, and Fortune magazines. The deal will be backed by the Koch brothers, two of the world’s richest men, through their ownership of Koch Industries.
Koch Equity Development, the private equity firm owned by the Koch brothers, offered Meredith $650 million in preferred equity to fund the Time acquisition. The Koch unit will not have a seat on Meredith’s board, and neither will it have any influence on Meredith’s editorial or managerial operations.
Meredith will give news, business, and sports brands to the Des Moines, Iowa-based publisher and broadcaster, which owns lifestyle magazines such as Better Homes & Gardens and Family Circle.
When combined, the Meredith and Time brands will have a total readership of approximately 135 million people and a paid subscription circulation of nearly 60 million. The deal also will expand Meredith’s reach with internet-savvy millennials, creating a digital media business with 170 million monthly unique visitors in the United States alone, and more than 10 billion annual video views.
In a prepared statement, Meredith President Tom Harty called the deal “transformative.” He said, “When you combine our strong local television business … with the trusted, premium multiplatform content creation of Meredith and Time Inc., it creates a powerful media company serving consumers and advertisers alike.”
“We are adding the rich content-creation capabilities of some of the media industry’s strongest national brands to a powerful local television business that is generating record earnings, offering advertisers and marketers unparalleled reach to American adults,” Meredith Chief Executive Stephen Lacy said in the statement.
Steve Lombardo, a spokesman for Koch Industries said, “We’re looking at deals across all sectors, all industries. This just happened to be one that made sense.”